What types of investors should consider these leveraged ETFs?

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ProShares – Ultra S&P500 (NYSEMKT:SSO) and Direxion Daily Semiconductor Bull 3X ETF (NYSEMKT:SOXL) Both use daily leverage resets, but SSO offers 2x exposure to the S&P 500, while SOXL offers 3x exposure to a concentrated semiconductor portfolio, resulting in different risk profiles and ultimate returns.

Both funds are designed for traders looking to amplify daily moves, but their core indicators and leverage levels set them apart. The SSO spans the entire S&P 500, giving broad market exposure, while the SOXL zeroes in on the semiconductor sector with an even more aggressive advantage. These comparisons highlight key differences in cost, risk, performance, and portfolio structure to help investors match the weights to their strategy.

Matric	S.S.O	SOXL
Issuer	ProShares	the direction
Cost ratio	0.87%	0.75%
1 year return (up to 2026-03-11)	37.3%	222.2%
Dividend yield	0.6%	0.3%
Beta	2.01	4.52
AUM	6.5 billion dollars	12.6 billion dollars

Beta measures price volatility relative to the S&P 500; Beta is calculated from five years of monthly returns. The 1-year return represents the total return over the past 12 months.

SOXL charges a slightly higher expense ratio than SSO, but both are on the high end for ETFs. SSO’s yield is significantly higher, which may appeal to those seeking a modest income stream from dividends.

Matric	S.S.O	SOXL
Maximum reduction (5 y)	-46.77%	-90.51%
$1,000 growth over five years	$2,234	$1,678

SOXL’s triple leverage and sector concentration result in greater volatility with a five-year decline close to that of SSO (91%) compared to SSO (47%). Despite SOXL’s recent rise, SSO has delivered the highest cumulative growth over the past five years, illustrating how leverage can have both advantages and disadvantages depending on market cycles.

SOXL provides pure-play exposure to the semiconductor industry, tracking a basket of 44 technology stocks. Its top properties include Micron Technology Inc (NASDAQ:MU), Nvidia Corp (NASDAQ: NVDA )and Applied Materials Inc (NASDAQ:AMAT)each make up less than 2% of the portfolio, and the fund has been trading for 16 years. Because SOXL leverages 3x daily and resets exposure daily, it is designed for short-term trading, not long-term compounding, and is highly sensitive to sector changes.

In contrast, SSO outperforms the S&P 500 using 2x leverage, resulting in exposure to 500 US large-cap stocks across technology, financial, and telecommunications services. Its largest positions are Nvidia Corp and Apple Inc (NASDAQ: AAPL )with a more diverse sector mix. Both funds resume daily extraction, which can lead to underperformance of the index over time, especially in volatile conditions.

Both ProShares – Ultra S&P500 ( SSO ) and Direxion Daily Semiconductor Bull 3X ETF ( SOXL ) offer high exposure to the S&P 500 and the semiconductor sector, respectively. Here’s what investors should know about these two ETFs.

For starters, we need to talk about profitability. Both these funds are highly leveraged. As a result, they are both highly volatile, and consequently, not suitable for every portfolio. What’s more, these ETFs are also designed to provide daily exposure. This means that over time, the returns of these funds can exceed their underlying index.

These funds can offer attractive rates of return, he said. SOXL, for example, has grown 72% in just the last six months.

However, these huge returns come with risk and cost. In terms of risk, each of these funds has experienced significant declines over the past five years. The maximum SSO reduction during this period was 45%; SOXL was the biggest drawdown 90%. As for expenses, both funds have slightly above-average fees. SSO has an expense ratio of 0.87%, and SOXL’s expense ratio is 0.75%.

In summary, these two ETFs are not for every investor. In fact, they are best for those with a very short time horizon and a taste for high risks and potentially high rewards.

For more guidance on ETF investing, see the full guide at this link.

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Jack Leach holds positions in Nvidia. The Motley Fool owns and recommends positions in Apple, Applied Materials, Micron Technologies, and Nvidia and is short Apple shares. Motley Fool has a disclosure policy.

SOXL vs. SSO: What types of investors should consider these profitable ETFs? Originally published by Motley Fool

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